Basically, a student's marks depend mostly (only?) on what they can do in a setting where AI is verifiably unavailable. It means less class time for instruction, but students have a tutor in their pocket anyway.
I've also talked with a bunch of teachers and a couple admins about this. They agree it's a huge problem. By the same token, they are using AI to create their lesson plans and assignments! Not fully of course, they edit the output using their expertise. But it's funny to imagine AI completing an AI assignment with the humans just along for the ride.
The point is, if you actually want to know what a student is capable of, you need to watch them doing it. Assigning homework has lost all meaning.